You heard me right. It’s an outright lie. And before you get upset, hear me out.
A few years ago, I had a friend named Kristi who worked for a management consulting firm. As part of their competitive commission package, they offered an unlimited PTO policy.
As a solopreneur, I take time off. Kristi did not. The reason why? Everyone at her organization felt busy and pressured to perform.
When you’re in a fishbowl of high performers and tight deadlines, the benefit of unlimited paid time off feels like a lie.
Unlimited PTO has become the hot new commodity for many companies pushing for better compensation/benefits packages to stay competitive in the market. And it can work for some companies.
Unlimited PTO might be a “benefit” if your organization has the right structures in place, but it does more harm than good if your job doesn’t.
What is an Unlimited PTO Policy?
Before we go any further, we’ve got to actually define what unlimited PTO is. Unlimited paid time off (PTO) refers to a policy where, typically, full-time employees aren’t restricted to a set number of vacation days at the start of each year, fiscal year or work anniversary.
This policy means you get to vacation when you want and for however long you want, no matter the stage of your career. You can take unlimited vacation days off as long as the time off doesn’t interfere with your ability to complete your work. But there is a caveat—just because an unlimited PTO policy exists doesn’t mean you can just not show up to work.
How Does Unlimited PTO Work?
Unlimited PTO policies vary in different jurisdictions. Generally, since there is no cap on the number of vacation days you can take, you are free to take as many days off as you want. If you want to take three weeks off and your work has either been completed or delegated to someone, then you are good to go. Enjoy your time off unashamedly.
There are plenty of significant differences between a standard PTO policy and an unlimited PTO policy. One of the most important? Most companies don’t have a tracking or recording system for vacation time in place.
In most companies, the process for requesting time probably consists of some combination of the following: Connect with your managers or supervisors, let them know the dates, fill them in on the assignments in your pipeline and their deadlines, and complete your plan for what can get done beforehand and what needs to be transferred to someone else.
Now listen, unlimited paid time doesn’t mean that you can tell your boss on Tuesday that you are leaving for vacation Wednesday, or just not showing up for work without speaking to your manager or supervisor. That’s just a sure-fire way to potentially lose your job.
The policy is also not a pass to just take a break most of the year and still get paid—that’s pretty frowned upon in the world of work.
Cons of Unlimited PTO
When you first think about unlimited PTO, it can seem nice, shiny and attractive, especially during your job search, if you are coming from a place that had a very limited PTO policy, or if you are looking for more overall flexibility. We get to thinking about endless possibilities of taking days to relax, travel, have “me days,” and more.
But I have to shatter the fantasy for you— unlimited PTO can feel disloyal when you are dealing with tight deadlines, employee burnout, and stressed coworkers. Taking “unlimited” vacation days can feel as if you are shifting your own work burdens onto your colleagues, creating a simmering stew of frustration, guilt, and stress.
Plenty of companies add unlimited PTO to show that they are more flexible to the needs of their employees and raise employee morale. But, most employers, not all, are only adding this policy because they know people won’t actually use their vacation days. If you ask me, that’s a dishonest and sneaky, but, unfortunately, a pretty standard mindset in the workforce.
This policy really feels like a big old lie.
People Fear Taking Time Off
The combination of an unlimited PTO policy and mindset has toxic results—people actually fear taking their much-deserved time off. Some company cultures even have an unspoken understanding that everyone only takes a certain amount of time in a year, an unsaid expectation set by company leaders.
That expectation alone can cause anyone to incorrectly use their time, potentially experience burnout and deviate away from any initiatives that they may have to “put their people first.”
Those expectations have been made even worse, in some cases, by the increase in remote and hybrid work. If you are working from home anyway, so the reasoning goes, why would you need to take time off?
Management perception can genuinely make or break this policy and make this more of a disadvantage than a perk meant to invest in you—especially depending on the way your job is structured.
You Don’t Get More Vacation Days
Having the option to take off whenever you want, for as long as you like (within reason), is definitely a dream come true for any professional. But the phrase “use it or lose it” doesn’t apply to this policy, especially if you are let go from your job.
Typically, if you are let go, your job will offer some sort of severance package that includes your unused PTO days. But with unlimited PTO, you won’t get those days back. They’ll simply vanish from existence.
My advice? If your job has an unlimited PTO policy, it’s probably a good idea to sit down with HR leaders and negotiate a way for the policy to add more value to your employment compensation package.
Employees Taking Advantage of the Policy
In the list of fears that businesses can have, having employees take advantage of this policy is probably in the top 10. Some people— not everyone—see unlimited PTO as a way to not come to work at all or skip out during critical times in the business. Basically, they want the benefits of work without actually working. While some people can get away with this approach to life, it just doesn’t work in reality.
Most times, the people who abuse this policy prevent you and your co-workers from taking your own vacation days. Managers and other colleagues can pick up the slack when someone is out, but when a person is consistently out, they tend to double the work of their co-workers.
Unfortunately, some people will always attempt to take advantage of this perk, but the risk can be lower if leaders and managers have a solid plan to handle the abuse.
Pros Of Unlimited PTO
Unlimited PTO definitely has it’s downsides, but just like in life, there are pros and cons to everything. Unlimited PTO can be an incredible perk for many companies and people. From attracting potential candidates to instilling a workplace that promotes having a life away from the job, unlimited PTO is a worthy policy.
But to make it a solid policy, you have to start at the top of the food chain. You have to start with leadership.
Any HR leaders considering working with their CEOs to implement this policy must be conscious of how it will go into effect. It can do a lot for the company if you let it.
This policy doesn’t have to be a lie if executives, founders and supervisors adopt a more progressive mindset and model good behaviors when it is being implemented. You have to lead by example.
Remember, you can’t just decide to take a vacation on Monday for three weeks and then tell your company you are leaving that same day. That approach doesn’t give anyone much time to prepare and also shows a bit of unreliability. So when an unlimited PTO policy is in place, you need to be conscious of the timing of your vacations.
While it’s out of your control when an emergency comes up, you can still work around the existing schedule and plan accordingly. You should always communicate with your managers and coworkers to ensure that vacation days don’t overlap. Every person is entitled to a real vacation. Make sure you’re planning accordingly so you can fully enjoy the time off that you deserve.
Building Trust and Flexibility
The biggest perks that people want from work today are more flexibility and genuine trust—from both sides of the relationship. Employees want the freedom to do their work in their best environment while retaining the ability to detach and not have their life be all about work. Achieving the ideal work-life balance is the goal. Well, an ideal work-life balance that works for you.
Offering unlimited PTO can help companies build on both of these concepts. With unlimited PTO, employers need to extend a certain level of trust that allows people to use their vacation times without feeling guilty while developing mutual trust between employees and employers.
Trust can improve the relationship and improve employee engagement—it even has the potential to increase productivity by at least 50%. You should also consider implementing a PTO policy that requires each employee to take a minimum number of days off. Language could include, “You must take X number of days, each year, or be held accountable,” for example.
Recruiting and Retaining Top Talent
After the Great Reshuffle, businesses have been focused on all things employee experience, especially when it comes to finding innovative ways to find and retain employees. It’s become almost like an obsession, but one focused on making it better. Almost all employers have been offering several perks like remote work, mental health days, and, more importantly, unlimited PTO.
Paid time off has always been important to job seekers, but let’s be honest, what we all want is to actually see the policy implemented into our employee experience after onboarding. It’s not enough to just dangle unlimited PTO in our faces and then just leave us to fend for ourselves.
To all leaders, advertise and implement this policy strategically because it can indeed be a great tool to add to your recruitment processes—when it’s done right. Just remember, as leaders, if you don’t fairly and unbiasedly apply this policy to your business, your unlimited PTO can—and will—turn out to be a genuine lie.
One of my favorite lines about PTO came from a good friend & generalist. He said “The funny thing about PTO is that you never take it. You just watch the numbers roll up in your account. Now if I give you a two week “use it or lose it” policy, then you’ll take time off”.
The more frustrating thing is the “use it or lose it” in an environment that discourages using it, or makes it difficult to use it. I see more people losing a “benefit” of their job because every time they submit a request, it’s not a good time.
@John, Use or lose it doesn’t change the behavior for many employees. For the last 16 years, I have worked at places with use or lose it. Too many employees lost days.
We always hear about how employees feel the pressure to perform so they decide not to take vacation days. However many times management puts actual restrictions on them. Employees are told vacation days cannot be taken at this time of the month or this time of year or during this project. Blacking out half of the calendar makes it hard for everyone to use all of their days.
Also many jobs are structured to have duties the preclude using all of one’s vacation days. For example, another manager and I got into a fight over new lower-level exempt job. The other manager want the position responsible for 1,800 to 2,000 man-hours per year. These duty hours did not include any time for company holidays, vacation days, training, or regular occurring meetings.
I said that people should not need to work OT to take a company holiday or vacation day off. The manager was so mad at my response that they just glared and quietly walked away.
Unlimited PTO is a big thing for startups to offer, especially since the compensation isn’t typically market rate. To your point, Laurie, it’s all about the culture! As a marketing consultant who frequently works with startups, I’ve seen a big difference in PTO usage and it comes down to how the founding teams or managers talk about time off, balance and life, and how they actually act.
John’s right. I think studies have shown that people take more sick days, for example, at companies that limit the number of days than at organizations that do not. Perhaps unlimited PTO is an evil corporate ploy to overwork everyone.